Mobile billing

Jonathan Jensen’s Thursday slot – this week he’s taking a look at mobile billing and how it’s now part of the drive for convergence.

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Today I’m looking at mobile billing and some of the factors that make it different to billing for landlines. As the market evolves towards a converged future, mobiles are starting to become a part of the convergence mix. Earlier in the week I showed this article to my wife. She read it and commented, “It’s a bit of a dry subject isn’t it?” My response, “Well yes, billing might seem as dry as dust but don’t forget it’s at the heart of the customer experience.” Anyway, another angle on the mobile world …

From a communications provider perspective the optimum model for consumer landline bills is typically quarterly customer bills and collecting regular monthly payments by direct debit. Quarterly billing reduces customer propensity to call in with bill queries because the customer is receiving fewer bills – 12 opportunities to call in, rather than four. It also lowers print and despatch costs. Monthly payment reduces the likelihood of bill shock by smoothing the payment cycle for customers and improves the communication provider’s cash flow. So when mobiles arrived why did the operators opt for monthly not quarterly billing? The potential to run up much larger bills than with landlines meant that operators were concerned about spiralling debt.

Debt management in the mobile arena poses some unique challenges. Mobile phones, unlike landline phones are not linked to a specific location. This increases the risk of fraud and bad debt and highlights the importance of robust credit checking and identity verification processes. In addition, the monthly service charge often includes repayment of a handset subsidy so an unpaid debt is a hardware as well as a usage exposure.

Mobile tariffs are often more complex than landline tariffs. As well as calls they have to contend with SMS, data and roaming and these differences make the billing more complex to manage. Compared to landlines, customers tend to change tariffs more frequently which adds to the billing complexity and the potential for customer confusion on the bill.

The communications market is increasingly focussed on offering the customer bundled propositions around landlines, broadband, mobile and television. These propositions demand a converged bill with all products on a single bill. Some of these bundled propositions are sold as separately priced products but true convergence means offering a bundled proposition at a single price point with cross product incentives and discounts, so requiring the multiple products to be built as a single product for billing purposes. Multiple products on a single bill increases the complexity of the bill for the customer which can easily lead to customer confusion and increases the likelihood of customers calling in with questions. The challenge is to design a bill that clearly conveys the content whether it covers one or four products and tells the customer what he or she wants to know simply and clearly. Layout and consistent terminology are the critical success factors here.

So, a brief glimpse at an often overlooked aspect of the mobile world.